Free Practice Questions for Iran CPA Exam

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Sample Iran CPA Exam Practice Questions

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1Under Iranian Accounting Standard 1 (*Presentation of Financial Statements*), which of the following is NOT an acceptable reason for departing from an accounting standard in the preparation of general-purpose financial statements?

A.Management believes that complying with the standard would be misleading in extremely rare circumstances where departure achieves a fair presentation

B.The departure is explicitly mandated or permitted by national statutory law that overrides accounting standards

C.Management determines that applying the standard would cause the entity to breach a restrictive debt covenant with a commercial bank

D.The accounting standard has been officially superseded or amended by the Audit Organization of Iran (*Sazman-e Hesabrasi*)

Explanation: Under Iranian Accounting Standard 1, commercial expedience, adverse financial consequences, or the potential violation of debt covenants do not justify non-compliance with national accounting standards. A departure is only contemplated in the extremely rare circumstance where compliance would be so misleading that it would conflict with the objective of fair presentation, or where explicitly governed by statutory decree.

2Under Iranian Accounting Standard 2 (*Statement of Cash Flows*, revised 1397), how is interest paid on bank borrowings classified by a commercial manufacturing company that is not a financial institution?

A.Operating activities only

B.Financing activities only

C.Either operating activities or financing activities, provided it is classified consistently from period to period

D.Investing activities only

Explanation: The 1397 revision of Standard 2 replaced the former five-heading cash flow statement with the three-category IFRS-style presentation (operating, investing, financing) and abolished the separate *Returns on investments and servicing of finance* heading. For an entity that is not a financial institution, interest paid on borrowings and dividends paid are now reported under financing activities, while interest received on loans granted is reported under operating activities. Income tax paid moved into operating activities in the same revision.

3A manufacturing company holds 1,000 units of finished goods with a total historical cost of 500,000,000 IRR. At the balance sheet date, the estimated selling price is 550,000,000 IRR, estimated completion costs are 30,000,000 IRR, and estimated selling expenses are 40,000,000 IRR. Under Iranian Accounting Standard 8 (*Inventories*), what is the inventory valuation on the balance sheet?

A.500,000,000 IRR

B.550,000,000 IRR

C.480,000,000 IRR

D.520,000,000 IRR

Explanation: Under Iranian Accounting Standard 8, inventories must be measured at the lower of cost and net realizable value (NRV). NRV is the estimated selling price less estimated costs of completion and estimated costs necessary to make the sale. Here: NRV = 550,000,000 - 30,000,000 - 40,000,000 = 480,000,000 IRR. Since NRV (480,000,000 IRR) is lower than cost (500,000,000 IRR), the inventory is written down and reported at 480,000,000 IRR.

4Under Iranian Accounting Standard 11 (*Property, Plant, and Equipment*), when an enterprise elects the revaluation model for a class of fixed assets, how should an increase in carrying amount arising on revaluation be treated?

A.Recognized immediately as operating revenue in the income statement

B.Credited to deferred tax liabilities without any change to net equity

C.Deducted from accumulated depreciation without altering equity reserves

D.Credited directly to equity under the heading of Revaluation Surplus (*Mazad-e Tajdid-e Arzyabi*) unless it reverses a previous revaluation deficit recognized in profit or loss

Explanation: Under Standard 11, when an asset's carrying amount increases as a result of revaluation, the increase is credited directly to equity under Revaluation Surplus. However, to the extent that it reverses a previous revaluation decrease for the same asset that was recognized as an expense in profit or loss, it is recognized in the income statement.

5An enterprise acquires specialized production machinery on 1 Farvardin 1403 for 1,200,000,000 IRR with an estimated salvage value of 200,000,000 IRR and an estimated useful life of 5 years. Using the sum-of-the-years'-digits method (*ravesh-e majmoo-e arqam-e sanavat*), what is the depreciation expense for the second year (1404)?

A.200,000,000 IRR

B.333,333,333 IRR

C.266,666,667 IRR

D.400,000,000 IRR

Explanation: The depreciable base is Cost - Salvage Value = 1,200,000,000 - 200,000,000 = 1,000,000,000 IRR. The sum of years' digits for 5 years is 1 + 2 + 3 + 4 + 5 = 15. In Year 1, the fraction is 5/15. In Year 2 (1404), the fraction is 4/15. Depreciation for Year 2 = 1,000,000,000 * (4 / 15) = 266,666,667 IRR.

6Under Iranian Accounting Standard 17 (*Intangible Assets*), which expenditure incurred during an internally generated software project must be expensed immediately in profit or loss?

A.Direct costs of testing software functionality during the development phase after technical feasibility has been established

B.Registration fees for filing patents and software trademarks for completed operational modules

C.Design and construction of selected production-ready prototypes prior to commercial launch

D.Salaries of software engineers engaged in original investigations undertaken to gain new scientific or technical knowledge (Research phase)

Explanation: Standard 17 strictly prohibits the capitalization of research expenditures (*hazineh-haye pazhoohesh*). All expenditures incurred during the research phase must be recognized as an expense when incurred, because an entity cannot demonstrate that an intangible asset exists that will generate probable future economic benefits.

7Under Iranian Accounting Standard 16 (*The Effects of Changes in Foreign Exchange Rates*), how are monetary assets and liabilities denominated in foreign currencies translated at the balance sheet date?

A.At the historical exchange rate prevailing on the date of the initial transaction

B.At the average exchange rate of the fiscal year, with exchange differences deferred in equity

C.At the closing rate (*nerkh-e etmam-e doreh*) prevailing at the balance sheet date, with exchange differences recognized in profit or loss

D.At the lower of the historical exchange rate or the market rate at the end of the reporting period

Explanation: Under Standard 16, foreign currency monetary items (such as cash, receivables, and payables) must be translated using the closing rate at the balance sheet date. Exchange differences arising on the settlement or translation of monetary items are recognized in profit or loss in the period in which they arise.

8Company P owns 80% of the voting shares of Company S. During the fiscal year, Company S sold merchandise costing 400,000,000 IRR to Company P for 600,000,000 IRR. At year-end, 30% of these goods remain unsold in Company P's warehouse. In preparing consolidated financial statements under Iranian Accounting Standard 18, what is the unrealized intra-group profit to be eliminated from ending inventory and consolidated net profit?

A.200,000,000 IRR

B.120,000,000 IRR

C.48,000,000 IRR

D.60,000,000 IRR

Explanation: The total gross profit realized by Company S on the intercompany sale is 600,000,000 - 400,000,000 = 200,000,000 IRR. The portion of inventory remaining unsold at year-end is 30%. Therefore, the unrealized intra-group profit embedded in ending inventory is 200,000,000 * 30% = 60,000,000 IRR. This full 60,000,000 IRR must be eliminated against inventory and consolidated profit (apportioned between parent and non-controlling interest).

9Under Iranian Accounting Standard 21 (*Accounting for Leases*), which condition indicates that a lease should be classified as a finance lease (*ejareh-ye sarmayeh-i*) by the lessee?

A.The lease term is for less than 25% of the estimated economic life of the leased asset

B.The lessor retains title and the asset reverts to the lessor at the end of the lease with no purchase option

C.The present value of the minimum lease payments at the inception of the lease amounts to substantially all (normally 90% or more) of the fair value of the leased asset

D.The leased assets are of a generic nature that can be readily used by any third party without modifications

Explanation: Under Standard 21, a lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership. One major indicator is that the present value of the minimum lease payments at inception amounts to substantially all (conventionally 90% or more) of the fair value of the leased asset.

10Under Iranian Accounting Standard 35 (*Income Taxes*), which of the following creates a deductible temporary difference (*ekhtelaf-e movaqqat-e kâhesh-dahandeh*) resulting in a deferred tax asset?

A.Accrued product warranty expenses recognized in accounting profit but deductible for tax purposes only when paid in cash in future periods

B.Accelerated tax depreciation exceeding straight-line accounting depreciation

C.Interest income earned on Iranian government treasury bills that is exempt from income tax permanently

D.Non-deductible social security and tax fines paid to state agencies

Explanation: Accrued warranty expense creates a temporary difference because the expense reduces accounting profit now, but will be deductible for tax purposes only when actually paid in future periods. This future tax deduction results in a deductible temporary difference and gives rise to a deferred tax asset (*darayi-e maliyat-e enteqali*), provided taxable profits will be available.

About the Iran CPA Exam Exam

The Iran Certified Public Accountant Selection Examination (آزمون انتخاب حسابدار رسمی) is the statutory national licensing examination administered under the Law on the Use of Specialized and Professional Services of Qualified Accountants as Official Accountants (enacted 1372 by the Islamic Consultative Assembly). Conducted under the authority of the Board for Recognition of Competence of Certified Accountants (Ministry of Economic Affairs and Finance) and organized via the National Organization for Educational Testing (Sanjesh), passing this examination qualifies practitioners for statutory licensure as Official (Certified) Accountants in Iran and admission to the Iranian Association of Certified Public Accountants (IACPA / جامعه حسابداران رسمی ایران). The examination rigorously tests four comprehensive domains: Financial and Management Accounting, Auditing and Professional Conduct, Tax Laws and Regulations, and Commercial, Public Accounting, and Financial Regulations. Candidates must possess an accredited degree in accounting or related fields and at least six years of qualified auditing experience (with statutory concessions for master's degree holders and recognized international qualifications). This question bank is an independent English-language multiple-choice study adaptation developed by OpenExamPrep. It offers 100 rigorous practice questions addressing the core accounting standards, auditing principles, tax statutes, and corporate regulations evaluated on the official examination. It is not an official translation, reproduction, or endorsement by the Ministry of Economic Affairs and Finance, IACPA, or Sanjesh.

Exam sponsor: Board for Recognition of Competence of Certified Accountants (Ministry of Economic Affairs and Finance) & IACPA. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

The examination is held annually in four subject papers: Accounting (Iranian accounting standards, cost and managerial accounting), Auditing (Iranian auditing standards, professional ethics, internal controls), Tax Laws (Direct Taxes Act, VAT Act of 1400, Taxpayer System Act), and Other Laws (Commercial Code, Public Accounts Act, Tender Law, Anti-Money Laundering Act). The Accounting, Tax Law and Other Laws papers are multiple choice; the Auditing paper carries both multiple-choice and descriptive questions, and the descriptive answers are marked only for candidates who first clear the threshold set for that paper's multiple-choice score. Each correct multiple-choice answer scores one mark and each incorrect answer carries the negative mark of that question. A subject once passed stays valid for four subsequent sittings.

Time Limit

Held on a single announced examination day; the official per-paper time allowance is not published

Passing Score

Set per subject as 70% of the average scaled score of the top 1% of candidates in that subject, so the threshold is relative to each cohort rather than a fixed percentage

Exam / Certification Fees

12,000,000 IRR for the 1404 sitting, paid electronically through Sanjesh; re-check before each cycle

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

30%

Financial and Management Accounting (حسابداری مالی و مدیریت)

Iranian national accounting standards (presentation of financial statements, inventories, PPE, leases, foreign currency, consolidation, taxes), CVP analysis, standard costing, variance analysis, and capital budgeting.

25%

Auditing and Professional Conduct (حسابرسی و آیین رفتار حرفه‌ای)

Iranian auditing standards (planning, risk assessment, evidence, sampling, analytical procedures, subsequent events, going concern, auditor opinions) and the IACPA code of professional ethics.

25%

Tax Laws and Regulations (قوانین و مقررات مالیاتی)

Direct Taxes Act (corporate income tax under Article 105, allowable expenses under Articles 147-148, depreciation rules, salary tax, real estate tax, dispute resolution procedures under Articles 237-251-bis, Article 272 statutory tax audit), Value Added Tax Act of 1400, and Cash Registers/Taxpayer System Act of 1398.

20%

Commercial, Public Accounting and Other Business Laws (قانون تجارت، محاسبات عمومی و سایر قوانین)

Commercial Code of Iran and 1347 Amendment (joint stock company governance, board of directors, statutory inspector/auditor, general assemblies, legal reserves, Sayad check law), Public Accounts Act (stages of public expenditure, role of Zi-Hesab), Tender Law, and Anti-Money Laundering Act.

Preparing for the Iran CPA Exam Exam

What You Need to Know

Passing score: Set per subject as 70% of the average scaled score of the top 1% of candidates in that subject, so the threshold is relative to each cohort rather than a fixed percentage
Assessment: The examination is held annually in four subject papers: Accounting (Iranian accounting standards, cost and managerial accounting), Auditing (Iranian auditing standards, professional ethics, internal controls), Tax Laws (Direct Taxes Act, VAT Act of 1400, Taxpayer System Act), and Other Laws (Commercial Code, Public Accounts Act, Tender Law, Anti-Money Laundering Act). The Accounting, Tax Law and Other Laws papers are multiple choice; the Auditing paper carries both multiple-choice and descriptive questions, and the descriptive answers are marked only for candidates who first clear the threshold set for that paper's multiple-choice score. Each correct multiple-choice answer scores one mark and each incorrect answer carries the negative mark of that question. A subject once passed stays valid for four subsequent sittings.
Time limit: Held on a single announced examination day; the official per-paper time allowance is not published
Exam / certification fees: 12,000,000 IRR for the 1404 sitting, paid electronically through Sanjesh; re-check before each cycle Official sources

Using Our Practice Resources

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Iran CPA Exam: Suggested Study Strategy

1Master the Iranian national accounting standards issued by the Audit Organization, especially Standards 1, 2, 8, 11, 16, 18, 21, 35 and 43. Check the standard number before you rely on it: Standard 4 is provisions, 29 is real estate construction, 30 is earnings per share, 31 is discontinued operations and 36 and 37 are the financial instruments standards.

2Thoroughly review the Direct Taxes Act, paying special attention to Articles 105, 147-148 (allowable expenses), 149 (depreciation), and the procedural dispute mechanism in Articles 238-251-bis.

3Understand the IACPA Code of Ethics, specifically the definitions of self-interest, self-review, advocacy, and familiarity threats and their statutory safeguards.

4Practice worked calculations for standard costing variances, inventory lower-of-cost-and-NRV write-downs, and lease present values.

5Review the Commercial Code 1347 Amendment rules regarding legal reserves (Article 140), general assembly quorums (Articles 84-85), and statutory inspector duties (Articles 144-156).

Frequently Asked Questions

What is the Iran Certified Public Accountant (Hesabdar-e Rasmi) Examination?

The Iran CPA Exam (آزمون انتخاب حسابدار رسمی) is the statutory professional qualification examination administered by the Board for Recognition of Competence of Certified Accountants under the Ministry of Economic Affairs and Finance. Passing grants licensure as an Official Accountant and admission to IACPA, authorizing the practitioner to sign independent audit and tax audit reports.

What are the eligibility requirements for the Iran CPA Examination?

Candidates need at least a bachelor's degree from a university recognised by the Ministry of Science in accounting or a comparable field such as economics or management, conditional on having completed at least 18 credits across accounting, auditing, financial management, commercial law and public finance. They must also have at least six years of full-time auditing experience after that degree, at least two years of it inside Iran. Candidates with three years of full-time audit experience at the Audit Organization or at an IACPA member audit firm, or six years of other relevant useful experience, may sit the exam and complete the shortfall after passing; three years at the Audit Organization or an IACPA member firm is required in all cases before the Official Accountant title is granted.

What subjects are tested on the Iran CPA Examination?

The examination tests four core subject areas: Financial and Management Accounting (30%), Auditing and Professional Ethics (25%), Tax Laws and Regulations (25%), and Commercial, Public Accounting, and Other Business Laws (20%).

Is negative marking applied on the Iran CPA Examination?

Yes. The registration announcement states that each correct multiple-choice answer scores one mark and each incorrect answer carries the negative mark of that same question, so guessing is penalised. Holders of a doctorate in accounting, or of an international professional credential recognised by the Board for Recognition of Competence, are exempt from the accounting and auditing skill papers.

Is this practice question bank an official examination simulation?

No. This question bank is an independent English-language study adaptation developed by OpenExamPrep to assist learners and professionals preparing for or researching the exam. The official examination is administered in Persian.